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CIRCULAR No. 36/2003/TT-BTC OF APRIL 17, 2003 GUIDING THE HANDLING OF GOODS LEFT IN BONDED WAREHOUSES

Pursuant to the Government's Decree No. 101/2001/ND-CP of December 31, 2001 detailing the implementation of a number of articles of the Customs Law regarding customs procedures, customs inspection and supervision regime;

Pursuant to the Prime Minister's directing opinions in the Government Office's Official Dispatch No. 5590/VPCP-KHTH of November 16, 2001;

The Ministry of Finance hereby guides the handling of goods left in bonded warehouses as follows:

I. SCOPE AND SUBJECTS OF APPLICATION:

This Circular guides the handling of goods left in bonded warehouses, prescribed in the Government's Decree No. 101/2001/ND-CP of December 31, 2001 detailing the implementation of a number of articles of the Customs Law regarding customs procedures, customs inspection and supervision regime. Goods left in bonded warehouses, which are handled under this Circular's guidance, include:

1. Goods, which are still left in the bonded warehouses, if past 90 days as from the dates the bonded warehouse-leasing contracts have expired, the bonded warehouse owners have notified such to and requested the goods owners to extend the bonded warehouse-leasing contracts, but the latter neither sign the extended contracts nor take goods out of the bonded warehouses.

2. Goods, which are not taken out of the warehouses by their owners, if past 90 days as from the dates the bonded warehouse-leasing extension contracts have expired, the bonded warehouse owners have notified the goods owners of such expiry but the latter failed to take the goods out of the bonded warehouses.

3. Goods falling under the cases prescribed in Clause 5 of Article 33 and Item d, Clause 1 of Article 36, of the Government's Decree No. 101/2001/ND-CP of December 31, 2001.

II. PROCESS AND PROCEDURES FOR HANDLING GOODS LEFT IN BONDED WAREHOUSES:

1. The bonded warehouse owners request in writing the bonded warehouse-managing Customs Sub-Departments to handle goods left in the bonded warehouses after the bonded warehouse owners notified in writing the goods owners of the cases of bonded warehouse storage expiry according to the provisions in Section I of this Circular.

The bonded warehouse owners shall have to compile and send sets of dossiers for goods left in the bonded warehouses to the bonded warehouse-managing Customs Sub-Departments. Such a set of dossiers comprises:

- An official dispatch requesting the handling of goods left in the bonded warehouses sent by the bonded warehouse owners to the bonded warehouse-managing Customs Sub-Departments;

- A bonded warehouse-leasing contract and a bonded warehouse lease extension contract already registered with the customs office (if any);

- Notices made by the bonded warehouse owner to the goods owner;

- List of quantities, types and specifications of goods deposited in the bonded warehouse under the warehouse-leasing contract with certification signature and seal of the bonded warehouse owner;

- Other dossiers and vouchers related to goods deposited in the bonded warehouse.

2. Councils for handling of goods left in the bonded warehouse:

- Within 15 days after receiving the written requests for handling of the bonded warehouse owners, the bonded warehouse-managing Customs Sub-Departments shall report such to the Customs Departments of the provinces, inter-provinces or centrally-run cities where the bonded warehouses exist for issuing decisions to set up the Councils for handling of goods left in the bonded warehouses (hereinafter referred collectively to as the Handling Councils), each of which is composed of:

+ The Council chairman: 1 leader of the provincial/municipal Customs Department;

+ The Council vice-chairman: 1 leader of the bonded warehouse-managing Customs Sub-Department;

+ The Council members, including:

l The bonded warehouse owner or the bonded warehouse's competent representative authorized by the bonded warehouse owner;

l Representative of the provincial/municipal Finance-Pricing Service of the locality where the bonded warehouse exists;

l Representatives of relevant units (if necessary, depending on the particularities of goods left in the bonded warehouse).

The number of members shall depend on the goods volume and handling tasks proposed by the bonded warehouse-managing Customs Sub-Department to the provincial/municipal Customs Department for decision. In the course of operation, the Handling Council shall be entitled to use the provincial/municipal Customs Department's seal in service of its work and necessary transactions.

- The Handling Councils shall automatically dissolve after completing the tasks prescribed in the decision on establishment thereof.

3. Process for handling goods left in bonded warehouses:

3.1. Inventory and classification of goods left at bonded warehouses for handling:

The Handling Councils shall carry out procedures for opening warehouse sealing, goods sealing or container sealing (if any), check and count the actual goods at the bonded warehouses, classify goods for handling according to the following directions:

- For goods which no longer have use value (decaying, rotten, damaged, with beyond-use quality deterioration according to the quality inspection results) or whose use duration inscribed on labels or dossiers enclosed therewith has expired, or goods banned from use or circulation under the Vietnamese law, the Handling Councils shall make records thereon in order to organize the destruction thereof.

- For goods which still have use value, are not on the list of those banned from import, prone to decay or whose use duration inscribed on goods labels or dossiers enclosed therewith is going to expire, the Handling Councils shall immediately organize the sale thereof on the basis of the quality inspection results, conducted by the expertising organizations set up and operating under law provisions, and value them on the basis of market prices in order to sell them to the organizations and/or individuals that have demands therefor.

- For goods which still have use value and are not on the list of those banned from import under the State's regulations, the Handling Councils shall seek the expertise of goods quality, value them on the basis of market prices and organize the auction thereof to organizations and/or individuals that have demands therefor according to the current regulations. If goods are on the list of those subject to conditional import, the Handling Councils shall report such to the provincial/municipal Customs Departments for further report to competent agencies for permitting the import thereof before selling them.

- Particularly for goods which still have use value but are on the list of those banned from import under the State's regulations, if this volume of left goods cannot be re-exported, the Handling Councils shall report such to the provincial/municipal Customs Departments for issuing decisions to confiscate them for the State's fund for handling under the Regulation on the management and handling of assets confiscated for State's fund and assets with State ownership formulated, issued together with the Finance Ministry's Decision No. 1766/1998/QD-BTC of February 7, 1998.

When organizing the sale of goods left in the bonded warehouses, the Handling Councils shall have to guide the goods purchasers in fully carrying out the customs procedures and observing tax law provisions as well as import and export management policies as for other import goods. Tax rates and exchange rates shall comply with the regulations at the time the purchasers carry out the procedures for taking goods out of the bonded warehouses. The payable tax amount shall be determined on the basis of actual selling prices of goods left in the bonded warehouse minus (-) sans-tax prices. Sans-tax prices, tax calculation methods and applicable tax kinds (value added tax, special consumption tax, import tax,...) shall be determined according to the provisions of tax legislation.

3.2. Organization of handling of goods left in bonded warehouses:

a/ Organization of auction: The Handling Councils shall determine the goods' reserve prices on the basis of the residual quality according to the expertise results, and market selling prices of new goods of the same type at the time the auction is organized. The auction order and procedures shall strictly comply with the State's current regulations on auction. The Handling Councils may organize the auctions or hire auctioning centers or auctioning enterprises to auction the volume of goods left in bonded warehouses on the basis of initial prices set by the Councils.

The Handling Council shall have to grant invoices issued by the General Department of Tax (for cases where auctioning centers or auctioning enterprises are hired to auction, these units shall grant invoices), dossiers and papers as prescribed and affix import stamps on goods items subject to import stamps according to the State's regulations. When directly selling goods left in bonded warehouses, the Handling Councils shall register to purchase retail receipts (goods sale invoices or added value invoices, depending on goods items) with the tax offices in order to grant them to the purchasers, and pay and settle tax with the tax offices according to the current regulations.

b/ Organization of destruction: The destruction organization must be made in records of destruction handling by the Handling Councils, to assign the bonded warehouse owners to destroy this goods volume to the witness of the Handling Councils. In case of necessity, relevant specialized State management agency(ies) shall be invited to witness the destruction.

For goods types whose destruction affects the environment, they must be approved and guided by local environment management agencies before organizing the destruction thereof.

III. MANAGEMENT OF FINANCIAL REVENUES AND EXPENDITURES UPON THE HANDLING OF GOODS LEFT IN BONDED WAREHOUSES:

1. All proceeds from the sale of goods left in bonded warehouses shall be remitted into the custody accounts of the provincial/municipal Finance-Pricing Services of the localities where bonded warehouses exist.

2. The provincial/municipal Finance-Pricing Services shall base themselves on the reasonability and validity of expenses related to the handling of goods left in bonded warehouses, which are requested by the Handling Councils, and consider relevant vouchers in order to make the payment according to the following priority order:

2.1. Expenses for the valuation and auction of goods left in bonded warehouses, including: expenses for inventory, expenses for quality expertise, expenses for valuation organization, for information and advertisement, for printing of auction documents and dossiers, expenses for auction organization, or auction charges (if any, paid to hired auctioning centers or auctioning organizations) strictly according to the regimes prescribed by the State.

2.2. Expenses for allowance paid to the Handling Councils' members at its meetings in the course of handling goods left in bonded warehouses at a level not exceeding VND 20,000/day/person.

2.3. Payment of import and export taxes as well as assorted taxes according to law provisions (if any).

2.4. Expenses for bonded warehouse services (if any).

2.5. Expenses for loading and unloading, for bonded warehouse storage according to the State's current regulations.

3. The remaining proceeds from the sale of goods left in bonded warehouses, after subtracting the expenses stated at Point 2, Section III of this Circular, shall be transferred from the custody accounts of the provincial/municipal Finance-Pricing Services at the State treasuries into the State budget.

In cases where the proceeds from the sale of goods left in bonded warehouses are not enough to cover the expenses, the payment thereof shall strictly comply with the priority order successively from Item 1 to Item 5, Point 2, Section III of this Circular. The State budget shall not offset expenses not yet paid because the proceeds from the sale of goods left in bonded warehouses are not enough to offset the expenses.

4. For goods left in bonded warehouses, which must be destroyed, all the expenses related to the destruction organization shall be paid by the bonded warehouse owners and accounted into the bonded warehouse enterprises' expenditures.

IV. IMPLEMENTATION ORGANIZATION:

This Circular takes implementation effect 15 days after its publication in the Official Gazette.

In the course of implementation, if any problems arise, organizations and individuals are requested to promptly report them to the Ministry of Finance for consideration and appropriate amendment and/or supplementation.

For the Finance Minister

Vice Minister
NGUYEN NGOC TUAN